- 4 -
|
4594, Page 4
• Joint owners. recorded at the Register of Deeds is received by the MDARD.
• S Corporation shareholders, except shareholders of If MDARD has not received a copy of the recorded agreement
S Corporations who had an FDRA before January 1, 1989, and before April 30, file the MBT return without that agreement.
in 1991 elected to file under the SBT Act on Form C-8022. When the FDRA is completed, the taxpayer must file an
amended MBT return to include the agreement.
• Grantor Trusts (if treated as an owner under Internal
Revenue Code § 671 to 679). NOTE: A taxpayer may not amend to revoke the election to
remain taxable under the MBT. Once the taxpayer makes a
• Trusts created by the death of a spouse if the Trust requires
valid election to claim a certificated credit, the taxpayer must
100 percent of the income from the Trust to be distributed each
remain in the MBT until the credit and any carryforward of
year to the surviving spouse.
that credit are exhausted.
Form MI-1040CR-5 is available on the Department of Treasury
(Treasury) Web site at www.michigan.gov/treasuryforms. Jointly Payable Checks
Claiming the Credit The taxpayer should take the check, check stub, and a copy
of the FDRA(s) to the county treasurer(s) who will have the
Income from taxpayers whose primary activity results from taxpayer endorse the check and then use the refund to pay any
the agricultural production may be subject to MBT. Michigan delinquent taxes. Any remaining amount will be returned to
Farmland Preservation Tax Credit (Form 4594) may not be the taxpayer.
filed alone. It must now be accompanied by Michigan Business
Tax Annual Return (Form 4567), MBT Refundable Credits Property Taxes That Can Be Claimed for Credit
(Form 4574), Schedule of Corporate Income Tax Liability for The property taxes levied in 2021 on enrolled land are eligible
a Michigan Business Tax Filer (Form 4946), and Schedule of for the 2021 credit, regardless of when they are paid.
Certificated Credits (Form 4947), at minimum.
Ad valorem property taxes that were levied in 2021, including
Attach a copy of U.S. Form 1120, 1120S or 1041, page 1, and collection fees up to 1 percent of the taxes, can be claimed for
copies of all the federal schedules completed for the federal tax credit. Special assessments (those not based on taxable value),
return. The following must also be attached: penalties, and interest cannot be claimed.
• A copy of the taxpayer’s 2021 property tax statement(s) with
Taxes on land not eligible for either the principal residence
corresponding agreement numbers listed on each.
or qualified agricultural property exemptions most likely are
• A copy of the receipt(s) showing that 2020 or 2021 property not eligible for the Farmland Preservation Tax Credit. The
taxes were paid. If property taxes have not been paid or receipt(s) exception is rental property where the tenant spends at least
is not attached, Treasury will mail a check made jointly payable 1,040 hours per year participating in the farming operation. To
to the Corporation, Estate, or Trust, AND the county treasurer compute the taxes that can be claimed for credit, exclude the
for the county where the property is located. (A new check school operating tax and multiply the balance by the percentage
payable only to the Corporation, Estate or Trust will not be of exemption allowed by the local taxing authority.
issued if it is later proved that the taxes had been paid.)
• If the property tax statement includes property that is not EXAMPLE:
covered under an FDRA, the taxpayer must show what portion Taxes levied $2,000
of total acreage and property tax is for land enrolled in the
School operating tax $350
FDRA. A local equalization officer or local assessor must
provide this information on official letterhead if it is not listed Principal residence exemption 60%
separately on property tax statements.
$2,000 $1,650
• If the property tax statement includes land on more than
one agreement, the property taxes must be allocated according - 350 x 60%
to the land in each agreement. The local assessor will be $1,650 $990 can be claimed for credit
able to determine what the breakdown is based on the legal If the taxpayer has entered into more than one FDRA with the
descriptions of the land enrolled under each agreement. MDARD, the sum of the taxes under each agreement is used
to compute the credit. The amount of credit the taxpayer will
When to Claim a New Agreement
receive is based on adjusted business income.
A taxpayer must have made the election to remain taxable under
the MBT beginning with the taxpayer’s first tax year ending Claiming a Credit for Farms Purchased in 2021
after December 31, 2011, in order for the taxpayer to remain That Were Already Enrolled in the Program
taxable under the MBT and claim certificated credits. If a A taxpayer must have made the election to remain taxable
taxpayer properly made this election with either a certificated under the MBT beginning with the taxpayer’s first tax year
farmland preservation agreement or another certificated credit, ending after December 31, 2011, in order for the taxpayer
the taxpayer may be able to claim a new farmland preservation to remain taxable under the MBT and claim certificated
agreement as well. New agreements must be approved by the credits. If a taxpayer properly made this election with either
local government by November 1, 2021, to claim a 2021 credit. a certificated farmland preservation agreement or another
However, the FDRA is not final until a copy that has been
|